Stocks take a fall amind investor unease
Low investor sentiment kept the Warsaw Stock Exchange (WSE) on the minus side last week, despite news of improvements in the current account deficit.
The broad-market WIG index lost 1.87% to 18,265.4 points, while trade volume was up 12.24% to zl. 583.41 million ($136 million).
A company that surprised one analyst when it ended the week on the way up was construction firm Mostostal Warszawa, up 5.30% to zl. 14.80 per share.
The company, which recorded first-half losses of zl. 20 million ($4.5 million), announced it would be selling off its newly completed headquarters because interest rates paid on the credit for the offices were killing the company.
"It proves that nobody made any forecasts on how the investment would work," said Pawel Puchalski, an analyst with Raiffeisen Capital & Investment Polska. "I think this company is in really big trouble, especially if they can't plan an investment carefully."
The company should earn around $2 million-$3 million from the sale of the building, Puchalski said.
It's a case of yet another construction firm that didn't have such good luck in the face of poor management, he said.
Meanwhile, construction firm Betonstal lost 22.51%, closing the week at zl. 7.40. The president of the company, Grzegorz Tuderek, has made bad strategic decisions similar to ones he made while running competitor Budimex, Puchalski said.
"It looks like Mr. Tuderek is a curse for construction companies," he said. "Any company he touches turns to rubble."
The tech-heavy TechWIG was also down 1.1% to 1670.9 points, although from the start of the week it looked as though an earnings streak from two weeks ago would continue.
Even Poland's two largest computer systems integrators, Prokom Software and Softbank, recorded losses of 2.21% and 3% ending at zl. 221 and zl. 84, respectively not too long after announcing a possible merger.
Polish conglomerate Elektrim closed at zl. 50.50 amid rumors of bids by foreign companies. Elektrim's stock price had remained unchanged all week, but was up 2.43% on Friday after the financial daily Parkiet said German telecom giant Deutsche Telecom and French telecom Vivendi could be interested in purchasing a stake in the company.
Elektrim is one of the most liquid stocks on the WSE, with a 76.8% freefloating stake.
"This gossip has been on the market for at least a week," said Wlodzimierz Giller, an analyst at Erste Securities Polska. "The closer the date of the start of the tender for the UMTS license, the more speculation there is." He added that there was speculation over which company would support Elektrim in the battle for the license. "Elektrim is not able to finance it on its own, because the company doesn't have a constant cash flow," Giller said. "The speculation about who would be with (Elektrim) is growing."
Zbigniew Lapinski, an analyst at Deutsche Bank, was surprised that the rumors were news to some. Lapinski prepared a report on Elektrim only a month ago. "I was saying in it that Vivendi, by buying a 5% stake in Elektrim, would be interested in purchasing more in the future," he said. "There is nothing new about (the rumor)."
Andrzej Kasperek, an analyst at COK Banku Handlowego, also confirmed rumors about Vivendi and Deutsche Telecom doing the rounds. "On the one hand, people say that Vivendi wants to strengthen its position on the Polish market," Kasperek said. "Or maybe Deutsche Telecom wants to enter the market. But didn't it have a chance to invest with Elektrim earlier?"
